MUHAMMAD WASI SAIGAL Versus RASHID AHMAD

1. MUHAMMAD HUSSAIN ADIL KHATRI, J.‑‑‑ This Judgment will dispose of High Court Appeal No. 36/88 filed by Muhammad Wasi Saigol (hereinafter referred to as appellant) and High Court Appeal No. 40/88 filed by Shaikh Rasheed Ahmed (hereinafter referred to as Arbitrator). Both appeals are directed against the judgment dated 20‑10‑1987 passed by the learned Single Judge of this Court in J.M. No. 28/86 whereby he accepted the application filed by Muhammad Wasi under section 14(2) of the Arbitration Act, 1940, and directed the Arbitrator to file the Award in Court within the period of one month. The above direction was subject to the condition that the appellant would deposit a sum bf Rs.3,50,000 (Rupees three hundred fifty thousands only) in Court within a period of 15 days. The appellant has challenged the order calling upon him to deposit the aforesaid amount and the Arbitrator has challenged the judgment calling upon him to file the Award in Court. Briefly, the facts are that the appellant and respondents Nos. 2 to 8 (hereinafter referred to as respondents) in High Court Appeal No. 36/88, are the heirs of late Muhammad Yousuf Saigol son of Qaim Din who died at Kobe, Japan, on 14‑2‑1985, and the disputes with regard ‑to the division, partition and distribution of the assets and properties left behind by him were referred for arbitration to the sole Arbitrator, Shaikh Rasheed Ahmed, by agreement of reference to arbitration dated 25‑10‑1985, executed by the heirs of the deceased. The Arbitrator gave his Award dated 23‑1‑1986.

2. The Arbitrator, according to the appellant, failed to file the Award in Court and, therefore, he called upon him by his Advocate's letter dated 12‑4‑1986, to file or cause to be filed the Award in this Court, within one week. The Arbitrator, in his reply dated 21‑4‑1986, informed the appellant that after the Award was given, some of the parties by letter dated 24‑1‑1986, had requested him to file the Award in the concerned Court at Japan as the properties and the cash to be distributed under the Award were situated and lying in deposit in the Banks in Japan and, accordingly, he had caused the Award to be filed in Court in Japan. The appellant on receipt of above reply filed J. Miscellaneous Application No. 28/86 in this Court.

3. The respondents including the Arbitrator, inter alia, raised an objection to the effect that the above application filed under section 14(2) of the Arbitration Act was barred by limitation, as the Award was given on 23‑1‑1986, in presence of the parties whose signatures were taken thereon and they had the notice of the making of the Award on that very day and, therefore, the above application should have been filed within 90 days thereof as prescribed under Article 178 of the Limitation Act, 1908. The application was filed on 28‑4‑1986, and was, therefore, delayed by as many as five days.

4. On behalf of the appellant, it was contended that the notice required to be given under section 14(1) of the Arbitration Act, referred to in Article 178 of the Limitation Act, of the making of the Award is regulated by section 42 of the Arbitration Act which provides that the notice is required to be given by post and to be registered under Chapter VI of the Post Office Act, 1898, and limitation is to commence from the date of service of such notice alone, if it is not delivered as required under clause (a) of the said section or served in terms stipulated in the agreement. The mere fact that the Arbitrator had pronounced the Award in presence of the parties and obtained their signatures thereon, is not sufficient to attract the provisions of Article 178 of the Limitation Act i.e. to say the limitation will commence only when the notice is served on the party as provided.

5. The learned Advocate relied upon the following authorities in support of the aforesaid proposition:‑‑

(1) AIR 1947 Sindh 145 (Hola Ram Verhomal v. Governor‑General).

(2) PLD 1964 Kar. 66 (Abdul Qayyum Khan v. A.M. Quddoos Khan).

(3) AIR 1955 Allahabad 573 (Misri Lai v. Bhagwati Prasad).

(4) AIR 1949 Patna 393 (Jagdish Mahton v. Sunder Mahton and others).

(5) AIR 1955 Nagpur 126 (Chouthmal Jivrajee Poddar v. Ramchandra Jiverajee Poddar).

6. In the above authorities the law laid down is that mere knowledge of making of the award was not sufficient and that the service of the notice by the Arbitrator is obligatory. The limitation under Article 178 of the Limitation Act, is to be computed from the date of the service of the notice of the making of the Award and not the date of knowledge. On the other hand, it was contended on behalf of the Arbitrator that the service of a written notice under subsection (1) of section 14 of the Arbitration Ad, is not essential and that it is sufficient if the party had a notice of making of the Award. He relied on the following authorities:‑‑

(1) AIR 1952 Punjab 350 (Gangs Ram v. Radha Kishan).

(2) 1985 SCMR 597 (Ashfaq Ali Oureshi v. Municipal Corporation, Multan).

7. The learned Single Judge distinguished the authorities relied upon by the learned counsel of the Arbitrator by observing that the said authorities pertained to notice under section 14(2) of the Arbitration Act which required a Court to give a notice to the party of the filing of the Award whereas subsection (1) of the said section laid down that the Arbitrator, after making and signing the Award, should give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the Arbitration and Award.

8. The learned Judge agreed with the submissions of the learned counsel of the _ appellant by emphasizing the importance and purport of the words, notice "in writing", used in subsection (1) and the omission of the said words "in writing" in subsection (2) of section 14 of the Arbitration Act.

9. We have heard Mr. Mushir Alam, learned Advocate for Muhammad Wasi, the appellant, and Mr. Khalid Anwar, learned Advocate for respondents Nos. 2 to 8, in both the appeals. Mr. Mushir Alam has raised the same contentions as were raised by him before the learned Single Judge and has relied on the same case‑law as has been referred to in the impugned judgment and has additionally drawn our attention to the following cases:‑‑

(1) AIR 1984 Rajasthan 110 (Chhotu Khan and another v. Jeewan Khan and others).

(2) AIR 1973 Allahabad 476 (The District Cooperative Development Federation Ltd. v. Ram Samujh Tewari).

(3) PLD 1962 Karachi 386 (Province of West Pakistan v. Messrs Fakir Spinning Mills Ltd. and another).

10. He has contended that section 38 of the Arbitration Act is not attracted as the Arbitrator is not capable to deliver the Award as the Arbitrator has alleged that the Award was already caused to be filed by him in the Court in Japan. Under these circumstances, the Arbitrator is not entitled to any fee from the appellant. He has alternatively contended that (a) sum of Rs.3,50,000 is an exorbitant fee claimed by the Arbitrator and (b) Muhammad Wasi should be made liable to pay only the proportionate share. He has placed reliance in this regard on PLD 1960 Lahore 591 (Muhammad Shafi and others v. Muhammad Sabir and others).

11. Mr. Khalid Anwar has raised the following contentions:‑‑

12. The learned Single Judge has put undue stress on the word "in writing" used in subsection (1) of section 14, as the notice to be sent by the Court pertaining to filing of the award is also sent in writing. He has drawn our attention to section 41 of the Arbitration Act which prescribes the procedure and powers of Court, making the provisions of the Code of Civil Procedure, 1908, applicable to all the proceedings before the Court and to all appeals under the Act. Order V, Rule 10, C.P.C. provides that service of the summons shall be made by delivering or tendering a copy thereof signed by a Judge or such an Officer as he appoints in this behalf and sealed with the Seal of the Court and Rule 10(a) of the said Order provides for service by post. Order XLVIII, Rule 2, provides that all orders, notices and other documents required by the Court to be given to or served on any person, shall be served in the manner provided for the service of summons i.e. to say under provisions of Order V, C.P.C.

13. He has placed reliance on AIR 1970 SC 1654 (Paras Ramka Commercial Co. Ltd. v. Union of India); AIR 1984 Bombay 62 (M/s. Nafees Begum and others v. Hikmatulla Muhammad Safi and others); AIR 1975 Delhi 215 (Jeevan Industries (P) Ltd. v. Haji Bashiruddin and others and AIR 1962 SC 666 (Nilkantha Sidramappa Ningashetti v. Kashinath Somanna Nigashetti and others). He also relied on the case‑law cited by the learned Advocate for the Arbitrator before the learned Single Judge. We would first take up the contention raised by Mr. Khalid Anwar on the proposition that the notice of the award given in any form by the Arbitrator, that is; by obtaining signature or thumb‑impression of the party on the award or delivery of copy of the award or to put it in other words date of knowledge of the award should be considered the starting point of time for computation of limitation under Article 178 of the Limitation Act.

14. The first leg of the contention in this regard is based on the provisions of Civil Procedure Code made applicable to service of notice under section 14(2) of the Arbitration Act. This argument need not detain us for the reason that the Courts while pronouncing the judgments on sufficiency of constructive notice of the filing of the award, have always been conscious of the fact that the notice by Court is to be given in writing under the Seal of the Court and the rule of constructive notice was construed and laid down with the aforesaid awareness of the law, on interpretation of Civil Procedure Code relating to service of notice and summons.

15. However, reference may be made to the case‑law relied upon by the learned counsel of the respondents. In the case of Paras Ramka Commercial Co. Ltd. v. Union of India, copy of the award signed by the Arbitrator was sent to the party in whose favour the award was made and it was held that the above act on the part of the Arbitrator was a sufficient notice to the party that the award had been made and signed. In the case of Mrs. Nafees Begum, the Arbitrator had taken thumb‑impression of the parties on the award after the award was signed by the Arbitrator. It was held that the petitioner had sufficient notice in writing of the award either on the day when the award was made or soon thereafter. It is also observed that the petitioner in that case had throughout been aware of the said award and they had received some benefits under the said award. In this case, the words "the notice in writing" used in section 14(1) of the Act were also noted. However, in the aforesaid case reliance was placed on the case of Paras Ramka Commercial Co. Ltd. In the case of Gangaram v. Radha Kishan reported in AIR 1952 Punjab 350, the award was signed by the parties and the date of signing of the award was treated as the date of knowledge of the fact that the award had been made, as it was the date when the party had the notice of the award. The limitation was accordingly construed from the said date. In the case of Nilkantha Sidramappa Nigashetti pertains to notice under section 14(2) of the Act and lays down that the oral intimation of filing of award given to the pleader of the Party is "service of notice" and the limitation under Article 158 of the Limitation Act, begins from such intimation.

16. No doubt, Indian Courts in the cases of Paras Ramka Commercial Company Limited and Mrs. Nafees Begum and others had taken a different view than the one which has constantly prevailed in this country. ,

17. In the aforesaid case‑law the learned judges of the. Indian Courts have not taken notice of section 42 of the Arbitration Act and the change. brought about by re‑enacting the provisions of notice to be given by the Arbitrator of making and signing of the award.

18. Section 42 specifically provides for service of notice by party or arbitrator and reads as under:

19. "42. service of notice by party or arbitrator.‑‑Any notice required by this Act to be served otherwise than through the Court by a party to an arbitration agreement or umpire shall be served in the manner provided in the arbitration agreement, or if there is no such provision, either‑‑

(a) by delivering it to the person on whom it is to be served, or

(b) by sending it by post in a letter addressed to that person at his usual or last known place of abode or business in Pakistan and registered under Chapter VI of the Post Office Act, 1898."

20. It may be pointed out that the Arbitration Act (Act X of 1940) has repealed and replaced Indian Arbitration Act (Act XI of 1898). Subsection (1) of section 14 of the present Act is almost reproduction of section 11 of the repealed Indian Arbitration Act (XI of 1898) except that in section 11 of the repealed Act the words "in writing" did not find place. While re‑enacting the aforesaid section 11, in the form of section 14(1) of the present Act, not only the aforesaid words were incorporated, but were also supplemented by the language of clause (b) of section 42 of the Act. This was done by the legislature with a purpose and an intendment which is to be gathered from the plain language that has been used. '

21. The analyses of section 42 shows that if any notice is required to be I served by any party or arbitrator or umpire, otherwise than through the Court; it shall be served:

(1) In the manner provided by the Arbitration Agreement.

(2) If the Arbitration Agreement makes no provision regarding the mode of service of notice, required by the Act, then service must be made, A either‑‑

(a) by delivering it to the person on whom it is to be served, or

(b) by sending it by post in a letter‑‑

(i) addressed to that person at his usual or last known place of abode or business,

(ii) and registered under Chapter VI of the Post Office Act, 1898."

22. The last mode of service is to be understood in juxtaposition of section 27 of the General Clauses Act (X of 1897).

23. It is thus seen that in clause (b) of section 42 the words "in a letter" have been used to synchronize the language of the said clause with the words in writing" used in subsection (1) of section 14 of the Arbitration Act, 1940.

24. Furthermore in both the sections 14(1) and 42 the word `shall' has been used for "giving" and "serving" the notice, to lend impetus to the making of the said provisions mandatory. Article 178 of Limitation Act (IX of 1908) is to be read in consonance with the aforesaid provisions of the Arbitration Ad and the limitation accordingly is to commence from the date of service of such notice.

25. The language used in the said section is so plain that no conclusion is possible other than the one that it is mandatory on the part of the Arbitrator or umpire, to give notice by way of letter i.e. in writing by registered post to the parties to the arbitration agreement, of signing and making of the award.

26. It is the cardinal principle of the interpretation of statutes that nothing is to be added to or substracted from the statutory language and that where the letters of law clearly and unambiguously convey the intention of the legislature, there is no rule of interpretation that will permit, to infer such intention on the part of the legislature, that will cause devastation to the plain language used in the statute.

27. We, therefore, with all due respect, do not find ourselves in agreement with the view expressed by the Indian Courts and hold that the limitation under Article 178 of the Limitation Act, 1908, is to be computed from the date of service of notice to be given by the arbitrator or umpire to the parties of the making and signing of the Award as required under sections 14(1) and 42 of the Arbitration Act and that the delivery of the copy of the award or signing of the award by the parties or oral intimation thereof, do not and cannot partake the notice under section 14(1) of the Arbitration Act for commencement of limitation under Article 178 of the Limitation Act, 1908.

28. We, therefore, agree with the finding of the learned Single Judge to the effect that the application filed by the appellant was not barred by Article 178 of the Limitation Act.

29. With regard to the directions given by the learned Single Judge in his order dated 20‑10‑1987 to deposit Rs.3,50,000 in Court on account of Arbitration Fee, the learned Advocate for the appellant has contended that" neither the Arbitrator had made any application for fixation or payment of Arbitration Fee, nor under the facts and circumstances of the case, sections 14 and 38 are attracted to justify such direction.

30. Section 14(1) provides that arbitrator shall give notice to the parties of the making and signing of the award and the amount of fee and charges payable in respect of the arbitration and award. No such notice was given. Subsection (2) of section 14 provides that the arbitrator shall cause, the award or signed copy thereof, together with any depositions and documents which might have been taken and proved before him, to be filed in Court upon payment of the fees and charges due in respect of the arbitration and the costs and charges of filing the award. As has been observed above, the arbitrator in this case was not in a position to meet the requirement of the aforesaid sub‑section and expressed his inability to, do so on the plea that he had already parted with the award as detailed above. Therefore, subsections (1) and (2) of section 14 are not attracted for payment of charges said to be due in respect of the arbitration and the award. No cost has been claimed by the arbitrator. Subsection (1) of section 38 of the Arbitration Act is attracted only when the arbitrator or umpire refuses to deliver his award except on payment of the fees demanded by him. The above section obviously, therefore, is not attracted to the present case, as the refusal of the arbitrator in the instant case is based on inability to do so. However, subsection (3) of section 38 may be said to be available to the arbitrator for requesting the Court for fixing the cost of the arbitration, if the arbitration agreement be silent with regard thereto. But the said section is restricted to the cost of the arbitration and not the fees of the arbitrator. The legislature has specifically used the word fees in subsections (1) and (2) of section 38 of the Arbitration. Act but in so far as subsection (3) thereof is concerned the word 'fee' has not been used therein. We are therefore of the opinion that the said subsection (3) of section 38 will not be attracted for determination of the fees of the arbitrator.

31. The Court can determine the fees of the arbitrator only under sections 14 and 38 of the Arbitration Act. The Court can order payment or deposit of the Arbitration Fees or fix the same only under the aforesaid provisions of the Arbitration Act when the Arbitrator has filed or caused to be filed the Award in Court or has refused to file the award for non‑payment of his fees, but the Court cannot exercise such power where refusal to file the award is for any reason alien to the said provisions of the Arbitration Act, including the one that he had already filed or caused the same to be filed in some foreign Court or had delivered the award to a particular party at his request. Under such circumstances the Court cannot enter into question of payment or fixation of the Arbitrator's fee.

32. The order passed by the learned Single Judge directing the appellant to deposit the Arbitration Fee in the Court does not fall within the purview of the said provisions of the Arbitration Act 1940 and therefore cannot be sustained and is accordingly set aside.

33. Consequently H.CA. No. 36/88 is allowed and H.CA. No. 40/88 is dismissed with cost.

34. AA./M‑1930/K Order accordingly.