PUNJAB STATE Vs. DINA NATH

JUDGEMENT

(1.) The crucial question that needs to be decided in these appeals is whether Clause 4 of Work Order No.114 dated 16th of May, 1985 (in short Work Order) which says that: "Any dispute arising between the department and the contractor/society shall be referred to the Superintending Engineer, Anandpur Sahib, Hydel Circle No. 1 Chandigarh for orders and his decision will be final and acceptable/binding on both the parties" constituted an arbitration agreement.

(2.) Before proceeding further, we may bring it on record that though the facts in both the appeals are identical, but for purposes of disposal of these appeals, the facts in CA No. 5197 are being considered which are as follows :

(3.) The parties entered into a contract for the work of dowel drain and wire crate at RD No. 9400 to 10400 kms. in the State of Punjab. The appellants made running payments to the respondent during the period of execution of the works in terms of the Work Order. However, after completion of the work, the final measurements were not made, nor the final bills were prepared. The dispute remained pending with the department for which the respondent called upon the appellants to finalise the dispute and prepare the final bill as per the rates quoted by the respondent and accepted by the appellants. A final notice was issued on 16th April, 1990, calling upon the appellants to refer the dispute to an arbitrator as per Clause 4 of the Work Order. Since the appellants had failed to appoint an Arbitrator, the respondent filed an application before the Additional Senior Subordinate Judge, Ropar, Punjab under Section 20 of the Arbitration Act, 1940 (in short the Act) seeking appointment of an Arbitrator.