K. Ramaswamy, J. - (1.) Leave granted.
(2.) Having heard the learned Senior Counsel M/s. P. P. Rao and K. Madhva Reddy on either side and having given our anxious consideration to their contentions, we find in final analysis that the order of the High Court needs no interference. The facts lie in a short compass, are as stated under : The respondent concluded a contract with the appellant on February 11, 1986 to construct a building at a cost of Rs. 1.00 crore. During its execution since differences had arisen the respon dent by his letter dated July 27, 1987 requested the Administrative Head of the appellant to appoint an arbitrator within 15 days from the date of its receipt. On August 8 and 18, 1987 the respondent was informed that the matter was under consideration. His renewed request in letter on August 17, 1987 evoked no action. Finding it futile to await, on July 7, 1988, the respon dent filed O.P. No. 167 of 1988 in the Court of the Subordinate Judge, at Nandyal to appoint an Arbitrator. The notice was issued to the appellant there in. By letter dated July 27, 1988 the respondent was informed of the ap pointment of Sri Yethiraj, Superintend ing Engineer of B.H.E.L., Hyderabad as sole Arbitrator. After giving oppor tunity, to both sides by Order dated March 12, 1991, the Civil Court ap pointed Sri Justice C. Sriramulu, a retired Judge of the High Court as Arbitrator. The High Court dismissed C.R.P. No. 1381 of 1991 on October 25, 1992.
(3.) Sri P. P. Rao learned senior counsel contended that the concurrent finding that Sri Yethiraj had bias against the respondent as he had acted on earlier occasions as an arbitrator of the appellant is vitiated by legal error since bias can always be waived. By the covenant of arbitration in the agree ment the respondent had waived bias. Secondly, it is contended that Yethiraj had no personal bias against the res pondent and the contract postulated of appointment of an Arbitrator. The con tract cannot be nullified on the plea of bias, as the endeavour of the Court would be to give effect to the contract. We find no force in the contentions. Cl. 65.1 of the contract reads thus : "Except where otherwise provided in the contract all disputes or questions relating to.........shall be referred to the sole arbitration of the person appointed by the Administrative Head of owner. There will be no objection to any such appointment that the arbitrator so ap pointed is the owners representative, that he had to deal with the matters to which the contract relates and that in the course of his duties as owners representative he had had expressed views on all or any of the matters in dispute or differences.............It is also a term of this contract that no person other than a person appointed by such Administrative Head as aforesaid should act as arbitrator and if for any reason it is not possible the matter is not referred to the arbitration at all......... Clause 65.2. Subject to as aforesaid the provisions of the Arbitration Act, 1940 (for short the Act added) or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceedings under this clause." ;