K.C. Agarwal, J. - (1.) This is an appeal under Section 39 of the Arbitration Act against the judgment of the II Civil Judge, Kanpur, rejecting the application of the appellant filed under Section 20 of the Arbitration Act for making of a reference of the dispute in between the appellant and respondent.
(2.) The appellant obtained a lease of plot No F-6 in Panki Industrial Estate measuring 3200 sq. yards from the U.P. State Industrial Corporation vide agreement/lease executed between the parties on 6th July, 1972 On the terms and conditions enumerated therein, the appellant was handed over physical possession of the plot as lessee. Under the agreement, the defendant had to make constructions for the purpose of establishing a factory. For making of that construction, the appellant was required to pay instalments needed for construction. The entire amount of Rs 38,400/- , which was to be deposited by the appellant, was divided in eight equal instalments of Rs. 4257.60 payable during the period 1972-79. The appellant had to commence the construction in six months from handling over of the possession in terms of clause 2(n) of the lease deed. The appellant did not do so. The defendant sent a notice to the appellant about determination of the lease on 6th January, 1977 The defendant re-entered into possession of the land on 18th January, 1977. The appellant was intimated about the same by means of a letter. After the re-entry was effected, the lease agreement was also determined by the defendant appellant and the proceedings for re-allotment of the land given to the appellant were started. It was thereupon that the appellant filed the application under Section 20 of the Arbitration Act for referring the dispute to the Arbitrator. The application under Section 20 was contested by the U.P. State Industrial Corporation
(3.) It is admitted in between the parties that the agreement contained an arbitration clause. The clause is 3(e). It runs as under : "That every dispute, difference or question touching or arising out in respect of the said deed or the subject matter thereof shall be referred to the sole arbitrator the Collector of the district where in the leased plot is situated or to any other person appointed by the other person appointed by the Collector.";