IN THE HIGH COURT OF SINDH

CIRCUIT COURT, LARKANA

 

Civil Revision Appln.          :           Ali Sher (through Legal heirs) vs.

No. S- 03 of 2017                             Managing Director Pakistan Petroleum Limited & others

 

For the Applicant                 :           Mr. Ghulam Dastagir A. Shahani, Advocate

 

For the Respondents          :           Mr. Muhammad Imran Abbasi,

Assistant Attorney General

                                                           

Date of hearing                    :           10.03.2022.

 

Date of announcement      :           10.03.2022.

 

JUDGMENT

 

Agha Faisal, J.         The applicant had filed a suit before the learned Senior Civil Judge, Kashmore, however, vide order dated 19.8.2015 the plaint was rejected. The operative findings are reproduced herein below:

 

            “From perusal of record it appears that the plaintiff has filed instant suit for recovery of Rs.28,80,000/- on the basis of agreement dated 20.08.2011 shown taken place between the parties.

 

            I have gone through the terms and conditions of the said agreement it appears that in clause 15 of the said agreement, the parties had agreed upon that in case of dispute arising between the parties, such dispute shall be referred for arbitration under Arbitration Act 1940, to two Arbitrators, one to be appointed by each party and in the event of disagreement between such Arbitrator the matter shall be referred to umpire whose name shall be agreed upon by the Arbitrators before enforcing upon the arbitration and award of the Arbitrators or the umpire shall be final and binding upon the parties.

 

            In view of the terms and conditions of the agreement the plaintiff was liable to approach to the Arbitration for redress of his grievance, if any arose to him in violation of agreement by other party. The plaintiff has not exhausted such remedy before proper forum and he has directly approached to this Court. The suit of plaintiff is barred under Arbitration Act and the jurisdiction of this court is barred under the purview of agreement. The suit of plaintiff is not maintainable under the law and the plaint is hereby rejected u/o VII rule 11 CPC with no order as to cost, however, after decision of the Arbitrator, if any party is dissatisfied from the decision, the aggrieved is at liberty to file civil suit before the Court having jurisdiction.”

 

2.            The appeal against the aforementioned order was also dismissed by the learned 1st Additional District Judge, Kandhkot, vide order dated 31.10.2016. The operative findings are reproduced herein below:

 

“I have gone through the terms and conditions of the said agreement it appears that in clause 15 of the said agreement, the parties had agreed upon that in case of dispute arising between the parties, such dispute shall be referred for arbitration under Arbitration Act 1940 to two Arbitrators, one to be appointed by each party and in the event of disagreement between such Arbitrator the matter shall be referred to umpire whose name shall be agreed upon by the Arbitrators before enforcing upon the arbitration and award of the Arbitrators or the umpire shall be final and binding upon the parties.

 

This clause 15 of the agreement transpires that the agreement executed between the parties is the Arbitration agreement as per section 2 (a) of the Arbitration Act 1940 and section 31 sub (20 of the same Act says:- “All questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed, and by no other Court. Similarly section 32 says:- Notwithstanding any law for the time being in force no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity or an arbitration agreement or award, nor shall any arbitration agreement or award be set-aside, amended, modified or in any way affected otherwise than as provided in this act. The Arbitration Act 1940, section 2 (c) further says:- “Court” means a civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit, but does not, except for the purpose of arbitration proceedings under section 21. Include a Small Cause Court. This act has also define Arbitration without intervention of the Court under chapter II and that the intervention of the Court under chapter-III, Section 20 proved the remedy to file an application before the Court having jurisdiction.

 

In the light of reasons and discussion above, I am of the humble view that the appellant have got remedy for Arbitration with the intervention or without the intervention of the Court under the Arbitration Act 1940 and such remedy is not exhausted from proper forum and he has directly approached to the learned trial Court. Hence the appeal of the appellant/ plaintiff is barred under Arbitrator Act and the jurisdiction of the learned trial Court is barred under the purview of agreement. Hence the appeal of the appellant/ plaintiff is not maintainable under the law and the orders passed by the learned Senior Civil Judge, Kashmore is maintained and the appeal of the plaintiff/ appellant is dismissed with no order as to costs.” 

 

3.            Learned counsel submitted that the grounds upon which the impugned orders are rested are not supported by Order VII Rule 11 CPC. It is stated that the presence of an arbitration clause in any agreement does in no manner bar jurisdiction of the Civil Court, however, the same may be invoked by a defendant and even in such situations the Civil Court retains jurisdiction even in respect of passing interim / preservative orders. The learned counsel for respondents has remained absent on several dates despite issuance of notice thereto and to the respondent itself.

 

4.            Heard and perused.It issettled law that the question of whether a suit was likely to succeed or not was irrespective of whether or not the plaint ought to have been rejected[1]. It is often seen that while a plaint could not have been rejected, however, a suit was dismissed eventually for a host of reasons. The evolution of law with respect to rejection of plaints was chronologically catalogued in the Florida Builders case[2] wherein the august Supreme Court demarcated the anvil upon which the decisions in such matters ought to be rested. A Division Bench of this court has held in the Rana Imran case[3] that in the instance of controversial questions of fact and / or law, the provisions of Order VII rule 11 CPC would not be attracted and the proper course for the court, in such cases, was to frame the relevant issue/s and decide the same on merit in the light of evidence and in accordance with the law.

 

5.            The respective courts observed that the rejection of the plaint was merited as the suit appeared thereto to be barred by law. The import of the word appear has been considered in the Florida Builders case[4] and the Supreme Court has deciphered the legislative intent to mean that if prima facie the court considered that it appears from the statements in the plaint that the suit was barred, then it should be terminated forthwith. The plaint does not make any apparent reference to any infirmity meriting non-suiting of the applicant, hence, no manifest infirmity per Order VII Rule 11 CPC was apparent. The presence of an arbitration clause in any underlying agreement could give rise to applications per the Arbitration Act for stay of suit etc., however, the same could not be made the basis of rejection of the plaint. It is the considered opinion of this court that the orders impugned were incongruent with the principles illumined by the august Supreme Court in Florida Builders and were fraught with material irregularity. The discretion conferred upon the subordinate fora appears not to have been exercised judiciously or in accordance with the sound principles of law.[5]

 

6.            The law contains an exhaustive mechanism for dealing with agreements involving an arbitration clause, however, the jurisdiction of a court of competent plenary jurisdiction is not rendered otiose. This approach of the learned trial court appears to have been erroneous and the same appears not to have been remedied by the appellate court.

 

7.            In view of the foregoing, the order of the learned trial Court and that of the learned Appellate Court cannot be sustained and the same are hereby set aside. The Order VII rule 11 CPC application before the Court of Senior Civil Judge, Kashmore is hereby dismissed.

 

8.            This revision application is allowed in terms herein.The learned trial court is directed to proceed with the matter expeditiously after framing the issues and recording of evidence.  The office is directed to communicate copies hereof directly to the learned trial court and the learned appellate court for compliance.

 

                                                                    JUDGE

                                                         

 


[1]Al Meezan Investment Management Company Limited & Others vs. WAPDA First Sukuk Company Limited & Others reported as PLD 2017 Supreme Court 1.

[2]Haji Abdul Karim & Others vs. Florida Builders (Private) Limited reported as PLD 2012 Supreme Court 247.

[3]Per Muhammad Ali Mazhar J. in Rana Imran & Another vs. Fahad Noor Khan & Others reported as 2011 YLR 1473.

[4]Haji Abdul Karim & Others vs. Florida Builders (Private) Limited reported as PLD 2012 Supreme Court 247.

[5]2007 SCMR 938; 2007 SCMR 933; 2007 SCMR 621.