JUDGMENT

R.V. Raveendran J.

1. The first respondent (State of A.P.) entered into an agreement dated 22.6.1987 in regard to execution of the work "Ongole Water Supply Improvement Scheme with NS canals as a source" in pursuance of acceptance of appellant's tender on 31.3.1987.

2. By GOM No. 430 dated 24.10.1983, the first respondent issued the following revised procedure in regard to arbitration introduced by GOM dated 31.7.1975. The relevant portions of the revised procedure (paras 2, 3 & 4) are extracted below:

GOM No. 430 [Irrigation (IRA V) Dept, dated 24.10.1983"

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2. The question of revising the above procedure has been receiving the attention of government for some time past.

3. Claims means all claims in the contract.

4. The orders referred to in paras 2 and 3 above shall be applicable to all the agreements entered into by Govt. from the date of issue of this order and will be applicable to all the Engineering Departments, in the State Govt. referred to para (6)."

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The above GOM dated 24.10.1983 was revised by GOM No.160 dated 1.6.1987 as follows:

"ORDER

Govt., after careful consideration of various aspects, issued orders in para (2) of the G.O. read above prescribing t