Sabyasachi Mukharji, J. - (1.) This is an application for leave to appeal under Article 136 of the Constitution from the judgment and order of the High Court of Gujarat dated 29th April 1988.
(2.) To appreciate the questions involved herein, a few facts have to be emphasized. In 1978, the State Government of Gujarat undertook a scheme known as 'Bhavnagar City Water Suppjy Scheme'. The Scheme was divided into two parts:(1) Raising Main; and (ii) Gravity Main. Raising Main was divided into two sections, namely, 10.1kms. and 7.4 kms. steel welded pipeline. On or about 15/16th December, 1978, the State Government issued letter of approval to the bargain between the parties on certain terms.
(3.) On 12th January, 1979, two contracts were awarded to the respondent No. 1 for Rs. 1,29,39,691/- and Rs. 94,30,435/- which provided the date of completion as February 1979 and the 3rd week of September, 1980 respectively. On 29th March, 1981 the respondent No. 1 filed the Civil Suit No. 588 of 1981 in the City Civil Court with regard to measurements recorded by the Deputy Engineer and alleged underpayments. On 4th June, 1981, the respondent No. 1 gave notice to the State Government and the petitioner Board requesting for reference of the alleged disputes to the arbitrator under Clause 30 of the agreement. On or about 8th July, 1981 the respondent No. 1 gave notice under Section 8 of the Arbitration Act, 1940 (hereinafter called 'the Act') calling upon the petitioner to concur in the appointment of one Shri G. G. Vaidhya. On 21st July, 1981, he withdrew the Civil Suit No. 588 of 1981. On 6th August, 1981, the respondent No. 1 filed a Civil Miscellaneous Application No. 231 of 1981 in the Court of Civil Judge, (SD), Ahmedabad for appointment of the said Shri G. G. Vaidhya as the sole arbitrator. On 7th November, 1981, the petitioner filed reply contesting the arbitrability of the various claims made in the application and inter alia contending that the application was not maintainable. On or about 15th December, 1981 the learned Civil Judge appointed Shri G. G. Vaidhya as the sole arbitrator with a direction that he should first decide as to which disputes fell within the purview of clause 30 of the agreement. On 5th may, 1982, Shri Vaidhya gave an interim award holding that the claims at S. Nos. 10(g) and 10(l) only were not arbitrable and further that the other claims were arbitrable. A petition was filed in the High Court which was dismissed and then there was an application to this Court under Article 136of the Constitution which was disposed of by consent on 30th November, 1983. The said order inter alia provided that the parties had agreed to settle the matter amicably and one Shri Mohanbhai D. Patel, Retired Secretary, Public Works Department, Gujarat and at that time Sitting Member of the petitioner Board was appointed as the sole arbitrator in place of Shri Vaidhya to decide all disputes between the parties relating to the following works: "(i) providing, fabricating, laying and jointing 1000 mm. dia. 10,000 M long steel welded pipe line under Bhavnagar Emergency Water Supply Scheme based on Shetrunji Dam - Agreement No. 5/2-1 of 1978-79. (ii) providing, fabricating, laying and jointing 1000 mm. dia 7,400 M long steel welded pipe line under Bhavnagar Emergency Water Supply Scheme based on Shetrunji Dam Agreement No. 8-2/2 of 1978-79.";