JUDGMENT

Mrs. Sujata V. Manohar, J.-Delay in filing S.L.P. (C) No. 20055/97 (CC 6248/97) is condoned.

Leave in both the petitions is granted.

2. These cross appeals arise from a common judgment of the Allahabad High Court. For the sake of convenience, the appellant, M/s. Ram Nath International Construction Pvt. Ltd. in the appeal arising from S.L.P.(C) No. 4328 of 1997 is referred to as the appellant while the State of U.P. is referred to as the respondent.

3. The appellant entered into an agreement with the respondent dated 17.2.1989 for the work of lining of the Upper Ganga Canal from kilometres 189.50 to 197.00 at Gesupur in Bulandshahr. The total amount payable to the appellant under the agreement was Rs. 48,14,312. Clause 32 of the tender which related to "Extra Items" stated, "Extra items of work shall not vitiate the contract. The contractor shall be bound to execute extra items of work as directed by the Engineer Incharge. The rates of extra items are to be mutually agreed". Clause 51 which provides for arbitration is as follows:

ARBITRATION :

All the disputes in respect of which the decision has not been final and conclusive shall be referred for arbitration to a sole arbitrat