Order

The appellants and others filed a writ petition in the High Court of Punjab and Haryana against the respondents. The case in the writ petition, briefly stated, was that the writ petitioners were owners of agricultural lands, residential buildings, tubewells, etc. at Gaddiwa­ra within the municipal limits of Panipat. The second respondent, the National Fertilizers Limited, had installed a plant for the manufac­ture of fertilisers in the vicinity. The second respondent had con­structed a ‘kucha’ bund around the original pond and was using it for dispositing effluents. The bund was made of earth which breached due to the excessive pressure of the effluents and the accumulation of burnt ash. The result was that water and ash had escaped from the pond and had damaged the writ petitioners standing crops, mango gardens and residential properties. There had been a loss of soil, from 6 inches to 2 feet, on their lands which had made them unfit for cultivation until such time as they were reclaimed. The second respondent had not done anything to redress the grievances of the writ petitioners. The writ petition, therefore, prayed for a direction to the second re­spondents to close its plant until effluent disposal arrangements were made and “to pay the damages of Rs. one crore for the destruction of residential houses, crops and Mango Garden. The respondent No. 2 may also be directed to reclaim the agricultural land of the petitioners which has been rendred unfit for cultivation. The respondents No. 1 and 3 may be dircted to take steps for civil and criminal (action) against the respondent No. 2”.

2. The writ petition was dismissed by a learned single Judge because it raised disputed questions of fact which could not be resolved in proceedings under Article 226. The order of the learned Single Judge was upheld by a Division Bench, the appeal being summarily dismissed.

3. The appellants (being five of the writ petitioners) filed a petition for special leave to appeal against the order of the Division Bench. Notice thereon was issued to the respondents.

4. Learned counsel appearing for the parties informed this Court on 15th July, 1997 that they had agreed to go to arbitration to settle their disputes and an adjournment was granted for one week to file the arbitration agreement. On 21st July, 1997, the following order was passed :

“Pursuant to our order dated 15.7.1997, the contestants have filed an Arbitration Agreement wheereby they have referred their disputes to the two named Arbitrators therein. Therefore, we grant leave and keep the matter pending till the arrival of the arbitration award. Let the Arbitrators be informed so that they enter upon the reference.”

The arbitration agreement stated, in clause 1, thus :

“That the dusputes and differences arising between the parties hereto in S.L.P. (Civil) No. 17106 of 1996 shall stand referred to the arbi­tration of Mr. Justice K.S. Tiwana and Mr. Justice G.R. Majithia, the retire Judges of the Hon’ble Punjab and Haryana High Court at Chandi­garh, who shall resolve and decide the aforesaid disputes between the parties.”

The agreement required the two learned arbitrators to appoint an umpire before entering upon the reference and provided for the modali­ties thereof. Pursuant thereto, Mr. S.S. Dewan, a retired Chief Justice, was appointed the umpire. On 20th September, 1997 the learned arbitrators, sitting with the learned umpire, entred upon the refer­ence.

5. The appellants filed a statement of claim dated 27th September, 1997 before the learned arbitrators. They contended that effluents such as fly ash emitted by the second respondent’s plant and slurry conveyed to the appellants’ land because of successive breaches of the bund and pond had caused havoc to the agricultural land, agricultural crops, mango onchards and fishery ponds and had destroyed the appel­lant’s land. Details were stated. The estimated value of profits list by the appellants were set out, aggregating to Rs. 4.2 lakhs fo