Syed Sadat Abdul Masud, J. - (1.) This is an application on behalf of a contractor under Sec. 20(1) of the Indian Arbitration Act, 1940, to file the arbitration agreement between him and Union of India represented by the General Manager, South Eastern Railway. On or about March 29, 1962, the Plaintiff entered into an agreement with the Defendant who was acting through the General Manager of the Dandakaranya Balangir Kiriberu Railway Projects for construction of some well foundation and masonry structure in piers of bridge. The said project which originally had its office at Waltair has recently been merged with the South Eastern Railway which has its office at No. 1 India Exchange Place in Calcutta within the jurisdiction of this Hon'ble Court. The said agreement contains an arbitration Clause and also detailed procedure to appoint two arbitrators, the material portions of which read as follows: Clause (63) of the General Conditions of Contract - -Demand for arbitration. If the contractor be dissatisfied with the decision of the Railway on any matter in question, dispute or difference, on any account or as to the withholding by the Railway of any certificate to which the contractor may claim to be entitled to or if the Railway fails to make a decision within a reasonable time, then and in any such case, but except in any of the excepted matters referred to in Clause (62) of these conditions, the contractor shall within 10 days of the receipt of the communication of such decision or after the expiry of the reasonable time, as the case may be, demand in writing that such matter in question, dispute or difference be referred to arbitrations. Such demand shall be delivered to the Railway by the contractor and shall specify the matters which are in question, dispute and difference and only such dispute or difference of which the demand has been made and no other shall be referred to arbitration. * * * 3(a) - -Arbitration. Matters in question, dispute or difference be arbitrated upon shall be referred for decision to - - (i) A sole Arbitrator who shall be the General Manager or a person nominated by him in that behalf in cases where the claim in question is below Rs. 50,000 and in cases where the issues involved are not of a complicated nature. The General Manager shall be the sole Judge to decide whether or not the issues involved are of a complicated nature. (ii) Two Arbitrators, who shall be Gazetted Railway Officers of equal status to be appointed in the manner laid down in Clause (3)(b) for all claims to Rs. 50,000 and above and for all claims irrespective of the amount or value of such claims if the issues are of a complicated nature. The General Manager shall be the sole judge to decide whether the issues are of a complicated nature or not. In the event of the two Arbitrators being divided in their opinions the matter under dispute will be referred to an umpire to be appointed in the manner laid down in Clause (3)(b) for this decision. (b) For the purpose of appointing two Arbitrators as referred to in Sub -clause (a)(ii) the Railway will send a panel of more than three names of officers of the appropriate status of different departments of the Railway to the contractor, who will be asked to suggest a panel of three names out of the list sent by the Railway. The General Manager will appoint one Arbitrator out of this panel as the contractor's nominee, and then appoint the second Arbitrator of equal status as the Railway's nominee either from the panel or from outside the panel ensuring that one of the two Arbitrators so nominated is invariably from the Accounts department. Before entering into reference, the two Arbitrators shall nominate an umpire to whom the case shall be referred in the event of difference between the two Arbitrators.
(2.) Disputes and differences arose between the Plaintiff and the Defendant relating to the said contract which fall within the scope of the said arbitration agreement. In March 1963, the Plaintiff made several representations claiming enhanced rate for his work in excavations deeper than those showing in the drawings. The Railway authorities by their letters dated March 8, 1963 and June 23, 1966, refused to accede to the request of the Plaintiff for enhancing the rates. It is also alleged that the Defendant has wrongfully withheld the Plaintiff's security deposit amounting to Rs. 46,416 although the Defendant has no claim whatsoever against the Plaintiff. The Plaintiff thereafter, by letters dated March 27, 1967 and July 31 1967, through his Solicitor, Mr. S.K. Guha, addressed to the Defendant to refer the said disputes to arbitration in terms of the said arbitration clause. In the last paragraph of the said letter dated March 27, 1967, the following statements are made: In the circumstances, I hereby serve you with notice under Sec. 8 of the Arbitration Act calling upon you to appoint two Arbitrators within 15 clear days from the receipt of this letter to adjudicate the above disputes failing which appropriate application will be made before the proper Court for necessary relief without any further reference for holding you liable for all costs and consequences. The Chief Administration Officer and Engineer, Dandakaranya Balangir Kiriberu Railway Projects, Waltair, replied to the Plaintiffs Solicitor, Mr. S.K. Guha, on May 11/12, 1967, in the last paragraph of which it is stated: In the circumstances explained above, you will perhaps agree that the notice issued under Sec. 8 of the Arbitration Act, 1940, for the appointment of two Arbitrators for settling the disputes is not in order as there can hardly be any dispute between your client and the Railway administration...if inspite of all these clarifications, should your client choose to move the Civil Court for relief, he would be doing so at his sole risk and responsibility and he will be liable for all the costs that the Railway administration may have to incur in defending the case.
(3.) Mr. Bholanath Sen, counsel on behalf of the Petitioner, has submitted that the arbitration agreement should be filed in this Court under Sec. 20 inasmuch as, admittedly, there has been an arbitration agreement between the parties and disputes and differences have arisen.;