ABDUR REHMAN Versus HAMID KHAN

1. NASIM HASAN SHAH, J. ‑‑This appeal, by leave of this Court, is directed against the judgment and decree dated 2‑7‑1978 passed by a learned Single Judge of the Peshawar High Court, Peshawar, in R.S.A. No.86 of 1971.

2. The relevant facts are that the appellant had filed an application before the Union Council Serikot, Hazara District for the recovery of Rs.200 from the respondent as price of the land measuring 71 marlas which allegedly he had sold to the respondent. On receipt of this application, the Chairman of the Union Council constituted a Conciliation Court as required by the Conciliation Courts Ordinance, 1961. The respondent, in his written statement, repudiated the claim of the appellant and on the other hand alleged that the parties had entered into an agreement of exchange whereby the land situated in Serikot belonging to the respondent was exchanged with the land situated in villages Bakka and Gidwalian belonging to the appellant. However, according to the respondent, the appellant refused to convey the land situated in village Bakka and insofar as the exchange had not taken place nothing was due from the respondent to be paid to the appellant.

3. It appears that the Conciliation Court instead of deciding itself the above dispute between the parties referred the parties to one Qazi Mian Abdul Haque of Campbellpur District for a "sharri faisla" Qazi Mian Abdul Haque gave his decision (sharri faisla) on 16‑10‑1967 describing it as' an award. This document was signed by both the parties and certain other persons as also Qazi Mian Abdul Haque. A note, however, was appended to it by Qazi Mian Abdul Haque to the effect that the appellant herein shall receive Rs.700 from the respondent at the time of the mutation. It is significant that whereas the recitals of the award indicate that it is based on the agreement of the parties; the recitals made in the note to the Award (Exh.P.W.2/1) are by Qazi Mian Abdul Haque and appear to be the decision of Qazi Mian Abdul Haque himself. The aforesaid sharri faisla (SHARRAI FAISLA ) was, thereafter, sent by Qazi Mian Abdul Haque to the Arbitration Council but the appellant herein refused to accept it on the ground that he was made to sign it under coercion. The Union Council, therefore, after reciting all the above facts and noting that the appellant was not prepared to accept the award of Qazi Mian Abdul Haque dismissed his claim and directed the respondent to file a suit, if so advised, for enforcement of his rights.

4. The respondent thereafter brought a suit in the Court of the Civil Judge Haripur for specific performance of the award dated 16‑10‑1967 given by Qazi Mian Abdul Haque. The appellant herein contested the suit, inter alia, on the ground that the suit was incompetent and was barred under the provisions of section 32 of the Arbitration Act 1940. Ten issues were framed by the learned Civil Judge on the basis of the pleadings of the parties, of which issues, Nos.4, 5 & 8 are relevant for our present purposes which may be reproduced below:‑

(4) Whether the suit is incompetent in its present form?

(5) Whether the award of the arbitrator dated 6‑10‑1967 is inadmissible in evidence, and is illegal and is not binding on the defendant? OPD.

(8) Whether the plaintiff is entitled to the declaratory decree as prayed for? OF P

5. The learned trial Court decreed the suit. The plea of the appellant to the effect that the suit was bad because the award related to the immovable property had not been registered was not accepted. His other plea that the suit was barred under the provisions of Section 32 of the Arbitration Act was also rejected. On appeal to the District Court, the learned District Judge, however, upheld the plea of the appellant that the respondent's suit was barred under section 32 of the Arbitration Act. He also upheld the plea that the award was bad both because it was vague and also because it was not registered under the mandatory provisions of section 17(1)(e) of the Registration Act. The appeal was, accordingly, allowed and the respondent's suit dismissed with costs.

6. The respondent challenged this judgment in the Peshawar High Court in second appeal. The appeal was resisted by the appellant on several grounds but during the arguments before the High Court the respondent, it appears, took up a new plea to the effect that the document dated 16‑10‑1967 was not really an award but was an "agreement of sale" between the appellant and the respondent and, therefore, it did not require registration as held by the learned District Judge. Furthermore, that insofar as possession stood already delivered to the respondent in pursuance of the agreement of the parties, the document was not hit either by the provisions of the Arbitration Act or the Registration Act. Or the other hand, the respondent could protect his interests on the doctrine of part performance laid down in section 53‑A of the Transfer of Property Act. These pleas were accepted by the High Court and the second appeal was allowed by it and the suit of the respondent again decreed. Hence this appeal, by leave of this Court.

7. The learned counsel for the appellant has submitted before us that the position taken by the respondent in the trial Court was that the document dated 16‑10‑1967 was an award and the suit filed by him was for its enforcement and that this position was re‑affirmed by him in the memorandum of appeal before the High Court. Consequently, the respondent's appeal had been allowed by the High Court by permitting him to take pleas before it which were not only inconsistent with his own pleadings in the suit before the lower Court but in the entire proceedings. This he could not do. Furthermore, the High Court in any case, had erred in construing the document dated 16‑10‑1967 by holding that it was not an award but was an "agreement of sale".

8. Mr. Samad Mahmood, Advocate, has, on behalf of the respondent, been also heard in reply.

9. After having both the learned counsel and perused the record we consider that a fundamental question which went to the root of the matter was overlooked by all the learned Courts below.

10. It may be observed that section 3 of the Conciliation Courts Ordinance 1961 is the provision which provides for the cases which can be referred to conciliation. Section 3(1) thereof, which is pertinent here, lays down as follows:‑

11. "Section 3. Cases referable to conciliation .‑‑

(1) Notwithstanding anything contained in Code of Criminal Procedure, 1898 (Act V of 1898), or in the Code of Civil Procedure, 1908 (Act V of 1908):‑

(a) all cases falling under Part I of the Schedule shall, save as otherwise provided hereinafter, be referred to conciliation under this Ordinance, and no Civil or Criminal Court shall have jurisdiction to try any such case; and

(b) any of the cases falling under Part II of the Schedule may be so referred if all the parties thereto agree to such reference.

12. A look at Part I of Section B of the Schedule, which deals with Civil Cases, gives jurisdiction in respect of "Suit for the recovery of money due on contracts , receipts or other documents".

13. The question whether the word "contracts" in the subsection includes both oral and written contracts or written contracts only, has been the subject‑matter of the controversy before the Courts of Pakistan and this Court in Zamiruddin Ahmad v. Havas Khan P L D 1969 S C 57 has held that the word "contracts" in this provision contemplates only written contracts and not suits founded on oral contracts. In this case, there was no written contract being relied upon by the appellant; hence the Conciliation Court had no jurisdiction to try this dispute. In the result, all the proceedings taken in pursuance of the application submitted by the appellant to the Conciliation Court, such as entertaining the application and taking further steps in pursuance thereof, were without jurisdiction and a nullity at law and of no legal effect; see Yousaf Ali v. Muhammad Aslam Zia and others P L D 1958 S C 104.

14. Apart from this, the High Court, in our opinion, has even otherwise completely misconceived the entire situation. The respondent was throughout basing his case on the fact that the document dated 16‑10‑1967 was an award and as the appellant was now resiling from it, it should be enforced. Merely because the document dated 16‑10‑1967 shows that it was founded on the agreement of the parties and was signed by both of them did not ipso facto make it an "agreement for sale" because Qazi Mian Abdul Haque, to whom this dispute was referred, was required to give a sharri faisla in respect of it. The document he produced was also described by him as an award and in the note appended by him at the bottom of the said document he directed one of the parties i.e. respondent to pay Rs.700 to the appellant at the time of the mutation, which direction was no based on the statement of the parties before him, which have been noted in the document dated 16‑10‑1967 (Exh.P. W.2/1). These circumstances also show that the said document was an award made by Qazi Mian Abdul Haque and not an agreement entered into by the parties. The fact that the suit filed by the respondent too was for enforcement of the award indicates that the suit filed by him was no for the specific performance of any agreement but was for the enforcement of an award. But as the validity of this was being challenged by the appellant, the suit was not competent being barred by the provisions of section 32 of the Arbitration Act.

15. In this view of the matter, we are clearly of the opinion that the judgment and decree passed by the High Court is untenable in law and cannot be sustained. On the other hand, the view expressed by the learned District Judge was correct and in accordance with law.

16. The result is that this appeal must succeed and is hereby allowed. The judgment and decree of the High Court dated 2‑7‑19.78 is set aside and that of the District Judge, Hazara (Abbottabad)1 dated 22‑1‑1971 is restored with the result that the suit of the respondent shall stand dismissed with costs. The appellant shall also have the costs of the appeal filed in this Court.

17. M.Y.H./A‑216/S Appeal allowed.