Judgment

SABYASACHI MUKHARJI, J.:- After hearing the parties fully we had by our order dated 10th March, 1988 dismissed the special leave petition under Art. 136 of the Constitution. We stated therein that we would indicate the reasons by a separate judgment later. We do so by this judgment.

2. This is a petition for leave to appeal under Art. 136 of the Constitution from the judgment and order of the learned Judge of the High Court of Bombay dated 2nd Feb, 1988. By the impugned judgment the learned Judge has rejected the application for revocation of the authority of respondent No. 1, Shri K.D. Bali, sole arbitrator under Ss. 5 and It of the Arbitration Act, 1940 (hereinafter called the Act). In order to appreciate the contentions raised, it may be stated that the International Airport Authority of India which was the petitioner in the High Court and is the petitioner herein had invited tenders for the work of construction of terminal building of new international passenger complex (Phase II) at the Bombay Airport at Sahar, Bombay. Respondent No. 2, M/s. Mohinder Singh and Company, a partnership firm having registered office at Delhi and carrying on business in Bombay submitted a tender and it was accepted for the value of Rs. 7,26,31,325/-. A formal agreement followed on 22nd January, 1982. It is not necessary to refer to the clauses of the agreement for the present purposes. It may be reiterated, however, that there was provision in the agreement for settlement of disputes through appointment of sole arbitrator under Cl. 25 of the Conditions of Contract by the competent authority. Certain disputes arose in which the petitioner sought claims amounting to Rs. 85 lakhs. Respondent No. 2 contractor approached the petitioner by letter dated 22nd Feb, 1985 to refer the disputes with regard to claims amounting to Rs. 85 lakhs to the arbitration. One Shri K.K. Sud, the Chief Engineer of the petitioner by his letter appointed respondent No. 1 as the arbitrator and made the reference with regard to the claim of Rs. 85 lakhs on 23rd Feb, 1985. On 8th March, 1985, it appears from the narration of the events in the judgment impugned that the arbitrator gave directions to the parties regarding submission of pleadings. Respondent No. 2 filed pleadings within time, but the petitioner filed its pleadings after a delay of two and a half months. On 17th March, 1986 respondent No. 2 addressed a letter to the Chief Engineer asking for reference of further disputes to the arbitration and accordingly on 16th May, 1986 a second reference was made referring 11 further points of dispute. A third reference was sought by respondent No. 2 on 22nd May, 1986 in respect of seven more claims but the petitioner informed on June, 12, 1986 that the third reference was premature. It appears that in respect of the second and third references the assertion of the petitioner was that these disputes were not referable to the arbitrator. The arbitrator had directed the parties to submit their statements in respect of second reference and though respondent No. 2 submitted its claim within the stipulated period, the petitioner had again delayed doing so according to the learned Judge and according to the assertions of respondent No. 2 for a period of three months. On 16th May, 1986 the Chief Engineer made reference No. 2 with regard to claims amounting to Rs. 1.17 crores to the arbitrator. On 23rd Dec, 1986 the Chief Engineer of the petitioner made another reference being reference No. 3 to the arbitrator with regard to claims amounting to Rs. 5.81 crores. The petitioner by its applications of 8th and 9th June, 1987 expressed its objections to the references Nos. 2 and 3 made by the Chief Engineer as according to the petitioner the said references were null and void as these were irregularly made. On 26th June, 1987 the petitioner by its written submissions took preliminary objection before the arbitrator to the said arbitration proceedings, being lack of jurisdiction