IN   THE   HIGH   COURT   OF   SINDH   AT  KARACHI

Suit No. 817 of 2009

Suit No. 467 of 2005

 

 

Plaintiff:-                        Grace Builders (Pvt) Ltd,

                                      Through Mr. Shaiq Usmani,

                                      Advocate for the plaintiff.

 

Defendant:-                    Defence Housing Authority, Karachi

Through Mr. Munawar Malik,

Advocate for the defendant/objector.

                                     

Date of hearing       21.04.2010

Date of Judgment   13.05.2010

 

J U D G M E N T

 

SYED HASAN AZHAR RIZVI, J          By this application being CMA No.7976/2009 the defendant has challenged the Award  dated 27.3.2009 passed by the Sole Arbitrator Mr. Justice (Retd) Saiduzzaman Siddiqui in Suit No.467 of 2005. The brief facts of the case are that the plaintiff who is a builder entered into an agreement dated 17.11.1983 with the defendant DHA Karachi regarding Plot No.45-B, Phase-V, Khayaban-e-Hafiz, Defence Housing Authority, Karachi admeasuring 6043 square yards. The defendant DHA Karachi agreed to lease out the aforesaid plot to the plaintiff for construction of a housing project, which has been completed. The plaintiff constructed a housing project namely "Grace Centre" on the said plot consisting of 60 flats and 134 shops. During the construction of the aforesaid housing project the plaintiff/builder committed various violations of the approved building plan and therefore, submitted revised plans for approval to the defendant. After long deliberations the defendant sent "Challan" vide letter dated 10th June, 2004 and 22nd October, 2004 followed by letter dated 5th March, 2005, demanded a sum of Rs.18,455,600/- towards the composition fee for unauthorized construction. The plaintiff instead of paying the amount filed this suit for declaration, that the impugned letter dated 5th March, 2005 of the defendant is illegal and quashed the same. The plaintiff filed the present suit for recovery of Rs.1,99,17,500/-, declaration and mandatory injunction. According to the clause-12 of the agreement dated 17th November, 1993 executed between the parties in case of any dispute or difference arising between DHA and M/s. Grace Builders Limited, the same shall be referred to the Sole Arbitrator or Brigadier Nazeer Ahmed PSC Contractor of Works and Engineer (Army) or his successor in office and his decision/Award in respect thereof shall be final and binding on the parties hereto. On 28.9.2006 this Court appointed Hon'ble Mr. Justice (Retd) Saiduzzaman Siddiqui as the Sole Arbitrator to decide the dispute in question.

2.         The parties appeared before the Sole Arbitrator on 16.12.2006 in response to the notice issued to them. The Claimant/plaintiff filed the claim on 13.1.2007 and reply to the claim was filed by the respondent/defendant on 3.2.2007 before the learned Sole Arbitrator. The learned Sole Arbitrator on 17.2.2007 settled the following issues within the pleadings of the parties.

1)                 "Whether the Claimant was delivered possession of Plot No.45-B measuring 6008 sq. yards in accordance with the agreement dated 17/11/1985? If not, what is its effect?

 

2)                 Whether the construction on the above plot was carried out by the Claimant in accordance with the approved plan? If not what is its effect?

 

3)                 Whether the amount demanded by the Respondent in para 15 of their reply by way of regularization charges is legal?

 

4)                 Whether the Claimant is entitled to an award in the sum of Rs.1,99,17,500/- besides refund of Rs.1.75 million against the Respondent.

 

5)                 To what relief the Claimant is entitled?

 

3.         The parties agreed to lead evidence before the Sole Arbitrator by filing affidavits-in-evidence of the witnesses with right of cross examination to the other side. The plaintiff/Claimant produced Syed Asif Ali S/o Syed Abdul Ghaffar as the only witness and after cross examination closed his side. The respondent/defendant filed affidavit-in-evidence of Major (Retd) Muhammad Abdul Sami Munium and closed the side after his cross-examination. After arguments of the parties the parties extension was granted by Hon'ble High Court for giving Award 31.3.2009.

4.         At the time of hearing of final arguments before the learned Sole Arbitrator the counsel for the Claimant/plaintiff did not press Issues Nos.1 & 4 and stated that his client will be satisfied if the award is given on Issues Nos.2, 3 and 5. Learned Sole Arbitrator after hearing of the final arguments on 27.3.2009 announced the Award as a result of the discussion in the Award has held that subject to payment of amounts mentioned in paras 15(1) to 15(4) of para wise reply filed by the respondent in reply to the Claim of the Claimants which works out Rs.1,929,200/-, the plaintiff/Claimant are entitled to the execution of sub-lease in favour of the allottees.

5.         On 1.6.2009 the learned Sole Arbitrator filed the Arbitration Award in the present suit i.e. Suit No.467 of 2005 new Suit No.817 of 2009 alongwith the original documents in this Court. Notices of Award were issued to the plaintiff and defendant on 4th June, 2009 for 11th August, 2009 the same were received to the plaintiff on 8.6.2009 and to the defendant on 5.6.2009. On 3.8.2009 the defendant by CMA No.7976/2009 filed objections to the Arbitral Award.

6.         I have heard Mr. Shaiq Usmani, Advocate for the plaintiff and Mr.Munawar Malik, Advocate for the defendant/objector.

7.         Mr. Munawar Malik, learned counsel for the defendant submitted that in paragraph 15 of the para wise reply filed before Sole Arbitrator, total amount of Rs.18,455,600/- is correct, but the amount of entries at Sr. Nos.(i), (ii), (iii) and (iv) are incorrect as one Zero in each of the entry is missing. The defendant has enclosed the copy of para wise reply to the claim of the plaintiff duly sworn on Oath by Col (Retd) Akther Ali Khan, Secretary of the defendant on 26.1.2007 and the same is enclosed as annexure alongwith the affidavit-in-evidence before Sole Arbitrator. In paragraph 15 of the said para wise reply therein hand written corrections/cuttings. Mr. Munawar Malik, Advocate submitted that it is a clerical mistake and similar type of mistakes has also been done by learned Sole Arbitrator at page-32 in the Award where it is mentioned that, "Claimant did not press issues No.1&4 and stated that his client will be satisfied if the award is given on issues No.3,4 and 5." Mr.Munawar Malik, Advocate stated that gross miscarriage has been caused to the defendant, Arbitrator ignored in the important evidence, Award suffers from the patent illegality and prayed to set aside the Award and decide the case on the basis of evidence. Mr. Munawar Malik, Advocate placed reliance AIR 1925 Calcutta 599 and NLR  1996 Civil page 63.

8.         Mr. Shaiq Usmani, learned counsel for the plaintiff while supporting the Award submitted that under Section 30 of the Arbitration Act 1940 an Award can not be set aside except on one or more of the following grounds namely:-

(a)               "that an arbitrator or umpire has misconduct himself or the proceedings;

 

(b)               that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings has been invalid under section 35; and

 

(c)               that and award has been improperly procured or is otherwise invalid."

 

9.         According to Mr. Shaiq Usmani Advocate, the learned counsel for the defendant has not taken any of the aforesaid ground in their arguments and objections to the Award. The plaintiff had admitted the claim of the DHA the defendant as stated in paragraph 15 of the para wise reply dated 26.1.2007. Mr. Shaiq Usmani, Advocate stated that if the defence plea of the defendant is taken to be true that "Zero" was missing from each entry in paragraph 15 of the para wise reply even then arguments of the defendant's counsel will be incorrect as an entry No.(iii) in paragraph 15 the amount of Rs.93,000/- after cutting has been written as Rs.93,600/- at page No.159. Learned counsel for the plaintiff has further drawn the attention of this Court to the findings of the learned Sole Arbitrator on this ground pertaining to the amount of regularization fee. The learned Sole Arbitrator has dealt with this point in the Award as under:-

"The photocopy of para wise reply show that corrections were made in the figures mentioned in para 15 by someone in his hand writing. On the basis of these corrections made in the amounts mentioned in para 15 of the para wise reply the witness claimed that the amount payable by the Claimant is not that mentioned in para 15 of the para wise comments but the one he stated in his evidence before the Arbitrator. The witness however, submitted in cross examination that he is not aware who made these corrections in the figures in para 15 of the para wise comments. No application was made to seek amendment of para 15 of the para wise comments at any stage of the proceedings before me. The para wise comments is on oath and the person who signed and swear the contents of para wise comments has not been examined by the Respondents to support the statement of the witness that the figures in para 15 of the pawa wise comments were incorrectly typed."

 

The learned sole Arbitrator has further observed in the Award that;

"The respondent's (DHA) witness admitted in his cross examination that there are no rules governing imposition of penalty or regularization charges in respect of violation relating to basement. It is however, not necessary to decide in these proceedings whether in the absence of a rule prescribing fee or penalty in respect of violation of construction of basement the DHA was entitled to recover regularization charges or penalty, as the Claimant (plaintiff) admitted in course of the proceedings that he is willing to pay the amount mentioned in para 15 of the para wise reply filed by the respondent (DHA) in response to the Claim of Claimants."

 

The learned Sole Arbitrator in the last page of the Award has observed that;

"The contention that the amount mentioned in para 15(1) to 15(4) is based on miscalculation is not supported by the evidence in the case as discussed above."

 

10.       Learned counsel for the plaintiff has relied upon 1968 SCMR page 275 the case of Abdul Rahman Munshi and 7 others Vs. Dr. Abdul Malek and 11 others. 1981 CLC page 339, M/s. Badaruddin H. Mavani Vs. Government of Pakistan, Ministry of Food and others, wherein it is held that Award cannot be set aside unless Arbitrator shown to have misconduct himself or Award improperly procured or otherwise invalid. In 1983 SCMR page 718 the Division Bench of Hon'ble Supreme Court of Pakistan has observed that;

"that despite the declared policy of the Government for ensuring speedy and inexpensive justice we find, all too frequently, that even Government Departments and statutory bodies indulging in wasteful and unnecessary litigation. It is at their behest that in all contracts entered into by them a clause is inserted to the effect that any dispute, which may arise during the completion of the contract between the parties, will be decided through arbitration rather than by the ordinary Courts. It is also usually stipulated that the Arbitrators, who may nominated for this purpose, must be the responsible officers of the said Department. It is, therefore, a matter of some regret that when an award is given by the Arbitrators, who are persons of their own choice and the award made is in a proceeding conducted in a forum desired by them but which is not wholly in accord with their point of view the Department of Government concerned instead of accepting the said award with good grace rushes to the Court with frivolous objections to prevent it from becoming the Rule of the Court and when these objections are overruled resort is taken to filing appeal upon appeal right upto the Supreme Court which not only results in further financial loss to the Department and further delay in the settlement of the rightful claim of the private party but also in the unnecessary waste of the valuable time of Courts which could be spent far more usefully in attending to other more meritorious cases. It is high time that Government Departments should accept more gracefully the awards made by forums selected by themselves and manned by their own officers. They would be well advised if they took greater pains and more care than they are doing at present in preparing and prosecuting their case before the Arbitrator rather than in subsequently expending their time, energy and efforts on fruitless objections and appeal against the awards made against by, them, for which they are mostly themselves to blame."

 

11.       After perusal of the complete record of the present suit the proceedings before the learned Sole Arbitrator and the objections to the Award by the defendant/objector I am of the view that no error of law or fact apparent on the face of the record so as to warrant interference therein has been committed by the learned Sole Arbitrator. The learned counsel for the defendant/objector has failed to satisfy that the Award could come within the mischief of any of the clause of Section 30 of the Arbitration Act. Neither any illegality nor any misreading in evidence has been pointed out by the counsel for the defendant/ objector.

12.       I, therefore, reject/dismiss the CMA No.7976/2009, objections to the Arbitral Award. Award is, thus made rule of the Court.

JUDGE