MUHAMMAD IBRAHIM KHAN AND Others vs Maulvi BEHRAM (THROUGH HIS
This petition for special leave to appeal arises from a judgment of the Peshawar High Court in a regular second appeal concerning a property dispute. The petitioners had filed a suit for declaration of ownership and possession, which the parties subsequently referred to arbitration during proceedings. Although the reference to arbitration was signed by only one of the plaintiffs, the co-plaintiffs actively participated in the arbitration proceedings without objection and failed to raise the issue before the trial court or in the first appeal before the District Judge. The core legal question was whether a reference to arbitration under Section 21 of the Arbitration Act is invalid ab initio if signed by only one of the co-plaintiffs, notwithstanding subsequent participation and conduct. The Supreme Court held that Section 21 does not require the agreement of all parties to be in writing, and that consent or agreement can be presumed or inferred from the conduct of the parties. Consequently, the petition was dismissed, establishing that active participation in arbitration proceedings waives formal written signing requirements by all co-parties.
- Whether a reference to arbitration under Section 21 of the Arbitration Act is void if signed by only one of the co-plaintiffs?
- Can consent to an arbitration agreement under Section 21 of the Arbitration Act be inferred from the conduct and active participation of the parties?
- Does Section 21 of the Arbitration Act require the agreement of all interested parties to be reduced to writing?
- Section 2(a), Arbitration Act 1940
- Section 21, Arbitration Act 1940
1. HAMOODUR RAHMAN, C. J.-This is a petition for special leave to appeal from the judgment of a learned Single Judge of Peshawar Nigh Court in a regular second appeal.
2. This appeal arose out of a suit filed by the first three petitioners herein and one Mst. Naimai (since deceased) for a declaration that they are the owners in possession of lands entered in Khata No. 61/308, Khasra No. 4403, measuring 3 kanals, situated in the area of Mouza Sufaid Dheri. The suit was brought because, the lands had been entered in the revenue records in the names of respondents Nos. 1 to 6 as owners. Respondents Nos. 2 to 6 had also purported to sell the lands to respondents Nos. 7 and 8. The petitioners claimed that these entries were wrong and that the sale was null and void and, in the alternative claimed that they should be given possession of the suit lands, if it is found that they are not in possession.
3. The suit was contested by the respondents who claimed that they had purchased the suit lands from the predecessors-in-interest of the petitioners by a registered sale deed executed on the 27th of October 1933 and that, in any event, they had acquired title to these lands by adverse possession for over 12 years.
4. Issues were framed, but before evidence could be recorded, the parties, on 8-9-64, referred their disputes to. The arbitration of the mehtamim of the mosque of Mobabat Khan at Peshawar.
5. The said arbitrator refused to arbitrate and, thereafter, on 19-10-64, Maulana Mufti Abdul Qayyum Popalzai was appointed arbitrator. Unfortunately the statement regarding the appoint--ment of the Maulana was signed on the side of the plaintiffs in the suit by Muhammad Ibrahim alone. His co. Plaintiffs, however, not only did not object to this but actually participated in the proceedings and appeared before the arbitrator who made his award on 18-1 65 dismissing the claim of the plaintiffs.
6. The plaintiffs, who are now petitioners, raised several objections to the award on merits but did not object to the competence of the Maulana to act as the arbitrator by reason of the- fact that the arbitration agreement had only been signed by one of the plaintiffs.
7. The other objections were heard by the trial Court and rejected. The award was accordingly made a rule of the Court.
8. The plaintiffs went up in appeal to the District Judge, Peshawar, and there, too, in the memorandum of appeal this objection was not raised. The objection was raised for the first time during arguments. It was disallowed, as the plaintiffs were found to have associated In the arbitration proceedings without any objection and also failed to take this objection either in their objection petition before the trial Court or in the memorandum of appeal. The award was also upheld on merits and the appeal was dismissed.
9. The plaintiffs came to the High Court in second appeal, and the only point urged in the High Court was that the reference was without jurisdiction and void, because, only one of the plaintiffs had signed the reference. The High Court, for the same reasons which prevailed with the District Judge, dismissed the appeal with costs.
10. The plaintiffs now seek special leave to appeal. It is contended on their behalf that, since an arbitration agreement under section 2(a) means a "written agreement to submit present or future differences to arbitration" and section 21 of the Arbitration Act provides that in a suit the differences and disputes shall be referred to arbitration only if "all the parties interested agree", the present reference signed by only one plaintiff was clearly bad, The facts of that case were that, on the petition of the plaintiff alone the Court ordered that the disputes be referred to arbitration of a sole arbitrator "with the consent of all parties". The arbitrator made an award which was challenged on the ground that one of the defendants in the suit had not consented to the reference.
11. The admitted position in that case was that the defendant whose consent was not obtained was a defendant against whom bankruptcy proceedings were pending and he had, therefore, disappeared. The case is, therefore, clearly distinguishable on facts.
12. Section 21 of the Arbitration Act does not lay down that the agreement of all the parties should be In writing. It will, therefore, be sufficient fn our opinion, if such an agreement can be presumed' or inferred from the conduct of the parties.
13. We see no reason to interfere and accordingly dismiss this petition.