D. S. R. VARMA, J.

( 1 ) HEARD both sides.

( 2 ) THE order, dated 27-12-2004, passed by the Chief Judge, City Civil Courts, hyderabad, allowing the petition O. P. No. 2217 of 2003 and appointing a retired judicial Officer as sole arbitrator to decide the dispute between the parties, is under challenge in the present Writ Petition.

( 3 ) OP. No. 2217 of 2003 was filed under section 11 of the Arbitration and Conciliation act, 1996 (for brevity "the Act") for appointment of Arbitrator for adjudicating the dispute between the parties.

( 4 ) THE petitioner herein is the respondent and the respondent herein is the petitioner before the Court below in O. P. No. 2217 of 2003.

( 5 ) THE facts, which are not in dispute, are that the respondent is a transporter doing transportation business. The petitioner is a public limited company. Both the parties have their Head Offices at Kolkata. They have their branch offices at Hyderabad also. The respondent has to transport the material to different parts of the country as required by the petitioner.

( 6 ) BE that as it may, for some reasons, the details of which are not worth mentioning, the petitioner had invoked the Bank Guarantee for a sum of Rs. 5,00,000/- given by the respondent through the Indian Overseas bank, Pathargatty Branch, Hyderabad. A decision was taken by the petitioner through proceedings, dated 16-9-2003, to invoke the Bank Guarantee furnished by the petitioner. Aggrieved by the said decision, on 17-9-2003, the respondent had addressed a letter to the petitioner to revoke the said proceedings invoking the Bank Guarantee. In case of failure, the petitioner sought for appointment of an Arbitrator.

( 7 ) THE Indian Overseas Bank at hyderabad addressed a letter, dated 17-9-2003, to the respondent that the Bank guarantee has been invoked by the petitioner on 10-5-2003, and hence the respondent was called upon to pay a sum of rs. 5,00,000/- immediately.

( 8 ) HOWEVER, the Bank Guarantee was invoked by the petitioner. Hence, in view of the communication by the petitioner to invoke the Bank Guarantee on 16-9-2003 and the letter addressed by the respondent to revoke the same or otherwise seeking appointment of an Arbitrator, it can safely be inferred that arbitration proceedings have commenced from 17-9-2003 itself.

( 9 ) AGGRIEVED by the said action of the petitioner, the respondent filed O. P. No. 2217 of 2003 under Section 11 of the Arbitration and Conciliation Act, 1996 (for brevity "the act") before the Court below, which is the designated Court having jurisdiction as per the scheme framed by this Court.

( 10 ) AFTER considering the rival contentions and the entire material available on record, the Court below allowed the said O. P. and appointed an Arbitrator. Hence, the present writ Petition.

( 11 ) MR. O. Manohar Reddy, the learned counsel appearing on behalf of the petitioner contended thatthe respondent was appointed as contractor to transport the material to different parts of the country, as required by the petitioner, for a period of two years commencing from 17-5-2003 to 16-5-2005; that some quantity was also transported; that as per Clause 2. 6 of the General Conditions of the Contract (for brevity "the GCC"), bills should be accompanied by distance certificate obtained from the competent authority from kolkata; that in spite of the application for distance certificate was there, no such certificate could be obtained; that though this fact was informed to the petitioner, still the petitioner was insisting on the same and proceeded further by invoking arbitration clause 13. 1; that the petitioner further proceeded with invoking the Bank Guarantee of Rs. 5,00,000/- furnished by the respondent at the time of tender. It is the contention of the petitioner that the contractor had taken the contract to lift the material and without intimating the petitioner in fact stopped supplying the material for transportation due to which the petitioner suffered heavy loss and the time b

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