- (1.) The first respondent (State of A.P.) entered into an agreement dated 22.6.1987 in regard to execution of the work "Ongole Water Supply Improvement Scheme with NS canals as a source" in pursuance of acceptance of appellant's tender on 31.3.1987.
(2.) By GOM No. 430 dated 24.10.1983, the first respondent issued the following revised procedure in regard to arbitration introduced by GOM dated 31.7.1975. The relevant portions of the revised procedure (paras 2, 3 & 4) are extracted below: GOM No. 430 [Irrigation (IRA V) Dept, dated 24.10.1983 2. The question of revising the above procedure has been receiving the attention of government for some time past. The government, after careful consideration of various aspects to issues involved direct the procedure be revised as follows : Value of Amount Panel of Arbitrators 1.Claims upto Rs. 10,000/- Superintending Engineer of another Circle (a) Another Chief Engineer of the same 2. Claims above Rs. 10,000/- upto Department. Rs.50,000/- (b) Where there is only one Chief Engineer, in the Dept., the Chief Engineer will submit proposals to Govt. in the Administrative Dept. for nomination of another Chief Engineers as Arbitrator by Govt. 3. Claims above Rs. 50,000/- Court of competent jurisdiction.
(3.) By letter dated 15.2.1990 the appellant lodged fourteen claims (of which claims 12, 13 and 14 related to pre-reference, pendente lite and future interest respectively) in regard to the said work, with the first respondent and demanded payment. As the first respondent did not settle the claims, the ap- pellant filed a petition before the Sub-ordinate Judge, Nellore, under Clause 73 of the A.P. Standard Specifications, requesting the said court to act as the arbitrator and settle the claims, in terms of the provision for arbitration, con- tained in the contract dated 22.6.1987. This was on the assumption that Item (3) of para 2 of GOM dated 24.10.1983 required all claims above Rs.50,000/- to be decided by arbitration, the named Arbitrator being 'the court of competent jurisdiction'. The Sub-ordinate Judge, by order dated 17.4.1990, held that he could not act as an arbitrator. Thereafter, the appel- lant issued a notice dated 6.6.1990, under section 8 of the Arbitration Act, 1940 ( 'Act' for short) seeking reference of the disputes to arbitration and furnished a panel of three names with a request to the State Government to concur in the appointment of any one from that Panel as sole arbitrator for adjudicating the disputes raised in his claim letter dated 15.2.1990. As there was no response, appellant filed OP No. 62/1990 under Section 8 of the Act in the Court of Sub-ordinate Judge, Nellore, seeking appointment of a sole arbitrator from out of the panel of three names suggested by him, to decide the disputes arising out of agreement dated 22.6.1987.;